[工程科技]第4讲企业理论-incomplete contract.pdfVIP

Seminar in Auditing Theory 审计理论专题 Seminar in Auditing Theory 第四讲 企业理论： Case Study: GM And Fisher Body Classical case study from a paper by Klein, Crawford and Alchian. • Around end WWI, new technology to create car bodies in metal. • In 1919 GM signs contract with Fisher Body; ten years, exclusivity. • To protect parties contract very precise: 　 price = variable cost 17.6%. 　 FB could not charge more to GM than to any other Manufacturer Price had to be smaller than price charged by other companies. 　 Arbitration clauses. End Of Story Contract did not last 10 years. • Demand for cars increases →increasing returns to scale kicks in →cost as capital cost decreases, but capital cost not included in contract costs. • Also, FB refused to move its factories close to GMs. →GM buys FB in 1926. Specific Investment • Specificity of the investment to the trading relationship arises if the asset has limited value or use if the parties to the transaction change. • The existence of relationship-specific investments means that an input supplier and a buyer will have an incentive to enter a long-term relationship. Asset Specificity • There are 4 common forms of asset specificity. Physical-asset specificity Site specificity Human-asset specificity Dedicated assets Quasi-rents • The quasi-rent associated with a specific investment is the difference between the value of the asset in its present use—the ex ante terms of trade—and its next best alternative use, its opportunity cost. Quasi-rents provide a measure of the specificity of investment. Ex Ante Ex Post • Relationship-specific investments implies that Ex ante: There are many possible trading partners and competitive bidding is possible. Ex post: Alternative trading partners for both input suppliers and firms will be reduced. Quasi-rent